One of the most common questions homeowners ask is: “Why is my home insured for more than it’s worth?” It is a fair question. The answer is that homeowners insurance is generally not designed around what your house might sell for on the real estate market. Its primary purpose is to help cover what it could cost to rebuild your home after a major covered loss. Those two numbers—market value and rebuilding cost—can be very different. What Is Replacement Cost? Replacement cost is an estimate of what it would take to rebuild your home today using materials and construction of
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